New Mobile Payment System 'Paym' Poses Challenge for Bitcoin

Bitcoin is revolutionary, both politically and technologically. For some it has also been hugely profitable. But for your average consumer, there is really only one important question: “Why is it better than what I’ve already got?”

A new payment system in the UK, which allows people to send money to each other using only mobile numbers, has just made answering that question even harder.

The system, Paym, is supported by nine of the UK’s biggest banks and is available to over 30 million people. It allows people to send money to each other digitally without having to remember bank account details; all that is needed is a mobile number.

To use Paym, you register your number with your bank and choose the account you want money to be deposited in when it is sent to your mobile number. From then on, friends will be able to send money to you easily via their banking app.

The system is very similar to Barclay’s Pingit app, but unlike Pingit, it isn’t restricted to a single bank. Bank of Scotland, Halifax, HSBC, Barclays, Lloyds, Santander and TSB are among the nine banks signed up.

RBS, NatWest and other banks will join the scheme later this year. Currently there is a £250 limit – but some banks may allow higher limits.

Convenient choice

In short, Paym is easy to use, it’s convenient and it’s useful. It is also presents a big challenge to advocates of bitcoin.

A currency that isn’t controlled by the state undermines government authority; a decentralized method of transferring ownership of digital assets is a great technological opportunity; but the more the banking sector does to make payments convenient for customers, the case for bitcoin as a rival weakens.

The reality for your average consumer – in the UK, at least – is that PayPal is a really convenient way of spending money online, touchless payments with modern debit cards are actually a very fast way of making purchases and, now, sending money to your friend is as straightforward as looking up their phone number.

“Paying someone back just got easier for millions of people,” said Adrian Kamellard, Chief Executive of the Payments Council.

If bitcoin is to prosper, bitcoin businesses will have to show they can make it far easier still.

Phone image via Shutterstock